Possession of old notes after December 30 may invite penalty of over Rs 50,000

The government may bring in an ordinance to penalise those found holding “high amount” of junked Rs 500 and Rs 1,000 banknotes after December 30, the last date for depositing the scrapped currency in banks.

The government may bring in an ordinance to penalise those found holding high amount of junked Rs 500 and Rs 1,000 banknotes after December 30.(Sunil Ghosh/HT File Photo)

The government may bring in an ordinance to penalise those found holding “high amount” of junked Rs 500 and Rs 1,000 banknotes after December 30, the last date for depositing the scrapped currency in banks.

“There is a thinking within the government to provide for penalising those caught with high amounts of banned notes. If this is introduced, it will be in the form of an ordinance,” a government official in the know of the matter said, referring to a constitutional provision that allows a law to be enacted when Parliament is not in session. The officer didn’t want to be identified.

Sources added that this would require the cabinet’s approval for implementation.

Reports said that there could be a cap of holding no more than 10 notes of each after December 30 and violation of the rule could draw a fine of a minimum of Rs 50,000 or 5 times the amount in question -- whichever is higher, but there was no confirmation.

After Prime Minister Narendra Modi announced demonetisation on November 8, the government had said exchange of old notes would be allowed at RBI offices till March 31, 2017.

But since the announcement, the government and RBI have frequently changed rules, 60 times at the last count.

Another source added that the exchange of limited value in old notes will be allowed at RBI offices, beyond December 30. “There will strict monitoring of the source of the notes being exchanged after December 30,” explained the source, who also did not wish to be named.

The scrapping of high-value notes and restriction on withdrawals has triggered a cash crunch. On December 30, also the day when limits of withdrawals ends, the government is expected to notify new cash rules.